Economy

Even with last week’s decline, the single European currency remains this year’s best performer after German Chancellor Angela Merkel said Jan. 12 her country would do “whatever is needed to support the euro,” exports grew and the ECB raised borrowing costs for the first time since 2008. Bloomberg Correlation Weighted Indexes show the euro has gained 3 percent against nine of its most-traded peers, compared with a drop of 5.1 percent in the dollar and 4.6 percent in the yen.

Worried about the speculative run-up and the increased volatility of the silver market, the officials concluded that it was time to raise the amount of money that buyers and sellers had to put down as collateral to guarantee their trades. The first increase in so-called margin requirements took hold the next day, effectively making it more expensive for speculators and other kinds of traders to play in the market.

According to the New York Times, Pakistani officials provided details of a “tense discussion” with “an American envoy who traveled to Pakistan on Monday,” as well as the growing suspicion among United States intelligence and diplomatic officials that someone in Pakistan’s secret intelligence agency knew of Bin Laden’s location, and helped shield him. “Obama administration officials have stopped short of accusing the Pakistani government — either privately or publicly — of complicity in the hiding of Bin Laden in the years after the Sept. 11 attacks on the World Trade Center and the Pentagon. One senior administration official privately acknowledged that the administration sees its relationship with Pakistan as too crucial to risk a wholesale break...”

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Kelly said the country faces “economic ruin” unless it walks away from last year’s bailout, withdraws support for banks and cuts its fiscal deficit to zero. Ireland’s debt will peak at 116 percent of gross domestic product in 2014, according to government forecasts published on April 29. The figure was 25 percent at the end of 2007. Energy Minister Pat Rabbitte said yesterday “in my own view” the debt stemming from Ireland’s bailout “must be rescheduled.”

Energy

And once again we get a reminder why the word "hedge" fund is such a misnomer. The FT reports the Clive Capital, the "world's largest commodity hedge fund" as defined by the FT (although we are more than confident various other and much largest "energy-heavy" funds would be much more appropriate for this moniker) lost $400 million out of its (paltry) $5 billion in total AUM during last week's coordinated energy take down, initiated by the forced margin intervention in precious metals.

Despite the tough years to come, Liao added, 2013 is expected to be the year when everything will turn well as markets such as Japan, Germany, Italy, the Netherlands, Spain and the UK achieve grid parity. Subsidy would not be needed by the industry; the government can propose policies such as part of the electricity generated must be from renewable energy sources, Liao commented.

Environment

The move is intended to air out the building that houses Reactor No. 1 to ensure that radiation levels are low enough to allow workers to enter. The plant’s operator, the Tokyo Electric Power Company, said the procedure would release little radiation into the atmosphere because an air filtering system installed last week had already removed most of the dangerous particles.

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Number of the Week: Class of 2011, Most Indebted Ever"Given the state of the job market, many degree-holders will face a long slog to get debt-free: The Collegiate Employment Research Institute estimates that the average salary for holders of new bachelor degrees will be $36,866 this year, down from $46,500 in 2009."

"In the near term, the debt burden could weigh on both the housing market and the broader economy. College graduates struggling to pay off debts are more likely to put off major milestones such as leaving home, getting married and buying a house, at a time when the creation of new households in the U.S. remains well below its long-term average."http://blogs.wsj.com/economics/2011/05/07/number-of-the-week-class-of-20...

Some of the comments just need to be saved for posterity and shared with everyone:

Quote:

11:20 am May 9, 2011Financial Aid Officer wrote:

Adding to the student loan over borrowing is an entire generation of parents who are so far in debt that they cannot help their children with college costs. At our school, over 50% of parents are denied a PLUS loan. Why? Because they have bad credit ratings. This generation of parents will enter retirement still oweing on their homes. They have less than 5% of what they will need for retirement in investments and savings. Their major asset is their home. Are they going to sell it and live on the street? Or, take a reverse mortgage and end up with about 1/2 their home value going as interest on that mortgage.

It is unfortunate that college kids are coming from homes where they feel “entitled”. They are entitled to use their student loan money on spring break in Cancun or Lake Tahoa. They “need” the latest cell phone, Ipod, designer label jeans, etc. They have no concept of having only 2 or 3 pair of jeans and 3 or 4 pairs of shoes. If they would “live below their means” during college they could avoid some of the debt. By making sound CHOICES and limiting the borrowing, they could have a better life. I have a friend who borrowed about $120,000 while working on her PhD (she never finished). The interest on the original amount was about $700 per month. She filed for hardship, etc. etc. Now the principal is over $150,000 and calculating what she would totally pay IF she ever begins payment on the loans, it would be over $450,000. She makes less than $50,000 per year so no matter what she does, she cannot possibly ever pay this off. Her life is so out of control that 10 years ago she filed bankruptcy on $60,000 of credit card debt. Still she keeps buying. The sad fact is that financial aid professionals cannot deny a student a loan. Well, we can if a student states flat out that they are not going to repay the loan. But, we would probably get sued. We have people coming to our school (a community college) with over $40,000 in student loan debt. And, they are over age 50. We cannot discriminate on age. Mathematically, these students will never be out from under this debt. Student loans have become the welfare of the year 2011.